Money News

Bank of England: Base rate to remain static this month

The Bank of England Monetary Policy Committee has held its monthly meeting and concluded that the UK's current base rate of 0.5 per cent will remain the same throughout August.

Additionally, the committee has also decided to continue with its asset purchases initiative and increase its funding from £50 billion to £175 billion.

It also pointed out that, although the UK economy is still in recession and GDP continued to fall during the second quarter of 2009, there is building evidence that output in the country's exports market is reaching stability.

Commenting upon the announcement, said he is glad that the committees has not been "lulled into a false sense of security" by reports of increasing consumer confidence.

He added: "In the current circumstances there are likely to be two quarters of growth as consumers bring forward expenditure in the fourth quarter to beat the prospective rise in VAT back to 17.5 per cent."